Wyoming LLC Operating Agreement: Everything You Need to Know
Your Wyoming LLC operating agreement is a formal agreement between members that details how the business is managed both operationally and financially.4 min read
2. Completing and Updating Your Wyoming LLC Operating Agreement
3. How to Fill Out Your Wyoming LLC Operating Agreement
Your Wyoming LLC operating agreement is a formal agreement between members that details how the business is managed both operationally and financially. When establishing a limited liability company (LLC) in Wyoming, drafting an operating agreement is important for standardizing your entity's rules and regulations. The operating agreement reduces the chance of future conflict between members because each one must sign the document and agree to its provisions.
Wyoming LLC Operating Agreement Basics
All LLCs in the state are governed by Chapter 29 of the Wyoming Limited Liability Company Act. Wyoming doesn't require LLC members to draft an operating agreement, despite the fact this document is considered the most effective way to organize your company's internal affairs. Since there is no formal requirement for a Wyoming LLC operating agreement, you don't have to mail the document to the Secretary of State's office. The operating agreement is essentially an “internal document,” so you only need to keep a copy with your own business records.
The operating agreement is meant to designate the LLC's owners (referred to as “members”) and what percentage of the business they own. The document also defines how the company is managed, how profits and losses are shared amongst members, and how taxes are paid.
In some cases, your business may require industry-specific management or more complex ownership agreements. If this is the case, or your business has multiple members or investors, it's best to consult an attorney when drafting your operating agreement. Single-member and family-owned LLCs shouldn't have an issue.
Although Wyoming doesn't require you to file your operating agreement with the state, there are some entities that may need a copy of the document for other purposes. These include:
- Real estate title companies
- Accounting or tax professionals
- Potential investors
Also, if you're ever sued and find yourself in court, you will probably need to submit a copy of your operating agreement as part of your court documents. Doing so can help the court determine your LLC's organizational structure.
Completing and Updating Your Wyoming LLC Operating Agreement
One of the benefits of establishing an LLC in the first place is having flexibility in managing your business. The operating agreement itself is a fluid document that's allowed to change as your company grows. Whenever you need to make simple changes, such as changing your registered agent or a member's address, simply update your operating agreement and save the new version in your records.
When more complex changes are involved, such as buying out member interests or raising investor money, you should hire a lawyer to undertake the revisions. Anytime changes are made, print the document and have all members sign the updated version. You should also keep all previous versions on file to refer back to them when necessary.
To complete an operating agreement, you should have access to some basic information. This includes:
- Your LLC's formation date
- Your registered agent's name and address
- The LLC's general purpose
- Member names and contact information
- Place of business
- Percentage of each member's ownership
You should also include how additional members are admitted and how a valuation of membership interest is determined.
How to Fill Out Your Wyoming LLC Operating Agreement
Use only black or blue ink to complete your operating agreement. The first section should list the LLC's name and when its formation documents were mailed. Next, write the state in which the LLC was formed and the effective date. Use an operating agreement template if necessary.
Subsequent sections should list your registered agent and registered office. The registered agent is someone, either yourself, another member, or a third-party representative, who accepts documents on your behalf. The information contained in your operating agreement should match the information listed in your official LLC formation documents.
Additional sections will list your LLC's business purpose and duration. List the entity's duration as “perpetual.” Perpetual means that the LLC will continue to exist until the members decide to dissolve it.
Page two of the operating agreement should contain the LLC's tax classification and financial provisions information. A single-member LLC should be listed as a “sole proprietorship” for tax purposes. Multi-member LLCs should list “partnership.”
Page three should start with the current tax year and accounting method information. Note the tax year as the “calendar year.” Most LLCs list “cash method” as the accounting method. Additional sections will include information related to member contributions, percent interest, cash allocation and distribution, and membership, withdrawal, and transfer provisions.
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